Millions of cardholders will be able to use their Wirecard-issued cards again from today. Last night the Financial Conduct Authority (FCA) lifted its restrictions on Wirecard and allowed the fintech firm to resume its services.
The regulator intervened and suspended Wirecard’s activity last Friday following the discovery of €1.9bn missing from the firm’s German parent company, Wirecard AG. EY, the auditor of Wirecard stated that there were “clear indications that this was an elaborate and sophisticated fraud, involving multiple areas around the world in different institutions, with a deliberate aim of deception.”
The regulator’s focus was to make sure that the money of customers held in safeguarded accounts was protected. Wirecard-issued cards operated under e money and payment services regulations and this means the funds held on them is not protected by the Financial Services Compensation Scheme (FSCS). Instead the regulation requires that monies connected to the operation of the cards is held in bank accounts which are not connected to the trading activities of the issuing company.
After a period of review between the FCA and Wirecard, they have now decided that the firm can continue to operate and enable the usage of their cards. However, Wirecard remains under close supervision by the FCA and, while it can return to offering e-money and payment services, it does have restrictions on where assets can be held and transferred.
Cards issued by Wirecard in the UK under the Mastercard scheme will be allowed to operate from today and any cardholders experiencing difficulties should contact their card provider. However, in an announcement made on Saturday 27 June 2020, Visa has decided to remove authorisation of payments through Wirecard-issued cards. The global payments company said in its statement “We’re sorry if this has impacted your ability to pay or access funds, and recommend you contact the company that provided your card to receive more information.”
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